Treasury's Bessent urges Warsh Fed chair hearings amid Powell investigation

WASHINGTON, DC: Treasury Secretary Scott Bessent said on Friday, February 13, that the Senate Banking Committee will proceed with confirmation hearings for Kevin Warsh, President Donald Trump’s nominee to lead the Federal Reserve.

The move comes despite a hold placed on Federal Reserve nominees by Senator Thom Tillis (R-NC) as the Justice Department investigates current Chair Jerome Powell over cost overruns tied to renovations at the Fed’s Washington headquarters.

The White House has not yet formally submitted Warsh’s nomination to the Senate. 

Scott Bessent says it's 'important' to begin hearings for Kevin Warsh

Speaking on CNBC’s 'Squawk Box', Bessent said that there is an understanding that the confirmation process should move forward at least through hearings.

“My understanding is that we are going to proceed with the hearings,” Bessent said.

“Sen Tillis wants to keep a hold on any vote with Kevin Warsh leaving committee, making it to the full Senate. But I think it’s important to get the hearings underway, and I think we have an agreement to do that,” he added.

Bessent emphasized the timing of the nomination, noting that Powell’s term ends in mid-May.

“I think it is important that we get to the hearings. Chair (Jerome) Powell's term ends mid-May, and anyone who cares about the integrity, the independence of the Fed is going to want to see continuity with Kevin Warsh,” he said.

Warsh, a former Federal Reserve Board governor, was nominated by Trump last month to succeed Powell as chair of the central bank. However, the White House has yet to formally transmit the nomination to the Senate. 

Bessent also indicated he had proposed that the Senate Banking Committee conduct its own review of the Fed’s renovation costs.

“We'll see where the investigation goes,” he said, referring to the Justice Department probe led by Attorney Jeanine Pirro. 

“There were subpoenas issued, but that doesn't have to mean that there are charges. They reached out to the Fed in December via email, didn't get responses, and then issued subpoenas. So we'll see what the state of that is,” he stated.

Thom Tillis maintains hold pending DOJ investigation

Tillis has said that he supports Warsh’s nomination but will continue to block any Federal Reserve nominee from advancing out of committee until the Justice Department concludes its investigation into Powell. 

“That happens one of two ways: They cease the investigation, say there’s no there there, or they give me compelling information that says I was wrong,” Tillis said.

He reiterated Bessent’s suggestion that enhanced Senate oversight of the renovation project would not change his position. 

“It doesn’t change my posture,” Tillis said, adding, “I made it very clear that the only way we move forward on any Fed nom … (is) until this is resolved." 

Tillis argued that the criminal probe risked undermining the Federal Reserve’s independence. “If we undermine the independence of the Fed, there will be catastrophic economic consequences,” he said.